Foreign investment flow increased last year, according to latest statistics

CSO report shows growing stock of international investment

Foreign direct investment into Ireland in 2012 was €30 billion, up from €17 billion the previous year, according to a report published yesterday by the Central Statistics Office.

The report, which outlines the amount of investment abroad by Irish-based entities and the amount invested here from abroad by foreign-based entities, gives details of how money going from and coming into Ireland travels via such locations as the Netherlands, Luxembourg, Bermuda and the Cayman Islands.

The report follows one published on Thursday by the American Chamber of Commerce in Ireland which said that US investment into Ireland in 2012, at $22.8 billion, was of a similar scale to all of the investment by US companies last year into developing Asia.

The stock or level of foreign direct investment into Ireland increased during 2012, to €258 billion from €225 billion, with the main contributors to the incresae being from the Netherlands (€22 billion) and Asia (€5 billion), with the net figure being in part offset by decreased investment of almost €8 billion from the US.

Annette Hayes of the CSO explained that the figures in the report show the immediate source of the money rather than the nationality of the parent company that might be involved. So an investment in an Irish subsidiary by a Dutch subsidiary of the same US multinational, is recorded as an investment from the Netherlands.

While the flow of direct foreign investment into Ireland in 2012 was €30 billion, the difference between the stock or level of foreign direct investment in Ireland at the beginning and end of the year, is the product of the net inflow/outflow as well as revaluations and currency changes that occurred.

The stock or level of foreign direct investment abroad that originated from Irish based entities increased during 2012 to €288 billion, from €256 billion at the beginning of the year. The stock of outward direct investment included €241 billion of equity capital and reinvested earnings.

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The net stock position at the end of last year was €31 billion, unchanged from the position at the end of last year.

Direct investment flow abroad from Irish entities was €14 billion, a change from the €1 billion disinvestment the previous year.

Investment abroad by Irish based entities was mainly into services, with 64 per cent of this being into the EU.

The largest sector for inward investment was financial intermediation, which at the end of the year represented 44 per cent of the total.

Foreign-owned direct investment enterprises earned €43 billion in 2012, a similar figure to the previous year.

Income earned abroad by entities based here was €17 billion, up €2 billion on the previous year. The immediate sources of these earnings were: offshore centres (€5.5 billion); Luxembourg (€3 billion); the US (€3 billion); and the Netherlands (€2 billion).

Flows of capital that are in the financial intermediation category often have minimal impacts on employment in the receiving jurisdictions, according to Professor Frank Barry from the Trinity College School of Business. The CSO data shows that €15.5 billion of the €30 billion direct investment flow into Ireland in 2012 fell into this category. Information and communication was €8 billion while total manufacturing was €2.19 billion.